Financing Your Education

1. Financing Your Education A Partnership between Government, School and Family.

2. Government • The government works to determine overall aid for students. • Your eligibility for aid is also established by the government. • Aid regulations apply to all schools.

3. School • Institutional assistance depends upon funding at each school. • Financial aid eligibility will vary from school to school. • School sets own eligibility requirements. Check with your school’s financial aid office for additional aid forms you may need to complete!

4. Family • YourExpected Family Contribution (EFC) is established by FAFSA. • Your EFCis the amount of money you and your parents can be expected to contribute to your college costs each year.

5. About the FAFSA • Free Application for Federal Student Aid • Determines eligibility for federal and many state financial aid programs • Colleges may require additional forms as well • File early to meet priority deadline • Three versions of the FAFSA you can use • Online –www.fafsa.ed.gov • PDF FAFSA – Print from your computer • Paper FAFSA – Call 800.4.FED.AID

6. FAFSA - Verification • About 1 in 3 FAFSAs are chosen for verification. • When this happens, you must supply additional information as requested. • Any requested information should be submitted to your prospective college as soon as possible, to prevent delays in your aid.

7. Types of Federal Financial Aid • Pell Grant • SEOG • Work-study • Perkins loan • Subsidized Stafford loan • Non-need-based Federal Aid • Unsubsidized Stafford loan • PLUS loan • TEACH grant Need-based Federal Aid There are additional Federal financial aid programs, most of which require you to file a FAFSA.

8. Federal and State Financial Aid Programs Work-Study provides part-time jobs to students, either on or off their college campus. You can use the earnings to finance his or her education.

9. Federal and State Financial Aid Programs Grants provide financial assistance that does not have to be repaid. Examples of Federal and state grants include: • Pell Grant ($5,350-2009/ *$5,710 -2010) • Supplemental Educational Opportunity Grant • Leveraging Educational Assistance Partnership Program *Proposed

10. State Grants in Virginia • There are four major grant programs in Virginia: • CSAP – College Scholarship Assistance Program • Virginia Commonwealth Award • VGAP – Virginia Guaranteed Assistance Program • VTAG – Virginia Tuition Assistance Grant • More details on these and other Virginia financial aid programs on: • Pages 6-8 of Virginia Opportunities booklet • www.schev.edu

11. College Based Financial Aid • Nearly 19 percent of available aid comes from colleges. • Contact the financial aid office of the college you wish to attend for more information.

12. Financial Need Definition of Need • Need is the cost of attendance (COA) minus your expected family contribution (EFC): COA – EFC = NEED • The cost of attendance varies for each school, so a student’s financial need will also vary for each school. • Use FinAid’s online calculators to help you determine your need: www.finaid.org/calculators

13. Federal and State Financial Aid Programs Loans financed by the federal government are guaranteed and are designed to give your child flexible repayment options. Examples include: • Federal Family Education Loan • William D. Ford Direct Student Loan • Perkins Loan

14. Federal and State Financial Aid Programs Additional Government Programs include: • TRIO Programs • The Hope Scholarship Tax Credit • The Lifetime Learning Tax Credit • Coverdell Education Savings Account

15. Tips for FAFSA Success • Before sitting down to file the FAFSA… • Download the FAFSA on the Web Worksheet • Provides a preview of FAFSA questions • Gather documents (both parents and students) • Income tax returns • W-2 forms and other income statements • Benefits records from state and federal agencies • Current bank statements

16. Tips for FAFSA Success • Meet all financial aid deadlines • Can vary from college to college • Meeting “priority deadline” results in best financial aid package available • It’s okay to estimate your financial information – Will get an opportunity to correct • List all colleges that you are applying to • Retain a copy of your completed FAFSA

17. Scholarships • A form of gift aid – money given to students that doesn’t have be repaid • Many different sources of scholarship funds: • Colleges/Universities • Religious/Civic groups • Community Organizations • Individuals/Corporations • Foundations • Employers

18. Successful Scholarship Candidates • Apply for many different scholarships • Request application allowing plenty of time to complete application requirements • Turn in error-free applications • Follow all application directions • Watch out for the fine print • Keep copies of completed applications • Are thankful and gracious

19. Scholarship Applications • May need to provide • Proof you have filed the FAFSA • Essays/personal statement • Letters of recommendation • Examples of work in specific study area/portfolio • SAT/ACT scores • Transcripts • Interview – in-person or phone

20. Private Scholarships and Grants • Organizations, foundations, businesses and other groups offer scholarships to academically promising students based on different factors. • Investigate possibilities by talking to your school counselor and visiting the local library.

21. Scholarship Scams Warning! Beware of companies that do any of the following: • Require a fee of any kind (including and up-front fee for a loan). • Refuse to release their telephone number and provide only a P.O. Box where you can mail your check. • Offer an award for which you did not apply. • Promise to do all the work.

22. Scholarship Scams • Guarantee you will win a scholarship. • Claim you cannot get the information they have and supply anywhere else. • Require personal information to “hold” the scholarship (like your banking or credit card information. • If you think you are the victim of scam, contact the Federal Trade Commission (FTC) www.ftc.gov/scholarshipscams

23. Understanding Award Letters • Read your award letter carefully • Could be either on paper or online • Look for instructions for next steps • Meet all deadlines • Keep your college aware of changing financial issues

24. Understanding Award Letters • Award letter • Lists types of aid • Accept or decline • Shows budget • Sign and return

25. Understanding Award Letters • What if it’s not enough? • Research private scholarships • Consider any potential employer benefits • Check into college tuition payment plans • Make financial aid office aware of changes in your financial situation • Reminder – you must complete the FAFSA to be considered for most types of aid

27. Financing

28. Financing Make a list of all financial aid to consider. This list should include: • Your family’s contribution • Federal and state loans • Federal and state grants and scholarships • College-based financial aid • Private loans • Private scholarships and grants

29. Loans FACT: Two/thirds of students (65.7%) graduate with some student loan debt. Rule of thumb: Do not borrow more than your projected first-year salary. Example: If your income will be $40,000/year, then you should try not borrow more than $10,000/year.

30. Loans • Federal Student Loans provide lower fixed interest rates, Unsubsidized and subsidized (government pays the interest while you are in school) and the six month grace period after graduation), and offer a choice of repayment options. • Federal Parent PLUS Loans can help supplement a student’s loan. The repayment obligation is on the parent. • Private student and parent loans have variable but competitive rates, are credit-based, and have a higher loan limit than federal student loans.

31. Tax Credits and Deductions Hope Scholarship Tax Credit • Provides a $1650 tax credit per student that is enrolled full-time. • A reduction of your calculated tax for qualified, out-of-pocket expenses and expenses during the first two (tax) years of college. • Financial aid/scholarships do not count towards qualified tuition. Lifetime Learning Tax Credit • Up to a $2,000 tax credit. • Applicable for students enrolled less than half-time. • May be claimed for an unlimited amount of years.

32. Tax Credits and Deductions Student Loan Interest Deduction • Up to a $2,500 deduction, even if deductions are not itemized. • Loan origination fees and capitalized interest count towards the deduction. • Students and parents can claim the deduction for past years by filing amended income tax returns.

33. Savings Plans to Finance Your Education IRA Early Withdrawal Provision for Education No penalty for early withdrawal of IRA funds to pay qualified educational expenses. Coverdell Education Savings Account Type of IRA in which contributions are made until the beneficiary reaches the age of 18.

34. Savings Plans to Finance Your Education Prepaid Tuition Programs College savings plans guaranteed to increase in value at the same rate as college tuition. 529 Plans Contributions to this kind of savings plan earn money on a tax-deferred basis (like a 401k) and are also tax-exempt when used to pay for qualified education expenses.

35. Budget Cut Costs by Curbing Expenses • Take advantage of free campus activities. - Buy used textbooks. • Exercise credit card restraint. • Carpool or take a bus when going home. Manage Money Wisely - Make a budget and stick to it!

36. FAFSA Help is Available • You can receive in-person help in completing the FAFSA at “Super Saturday” events • Financial aid professionals will help you complete the FAFSA online • Check with Guidance for dates – usually in January and February • Details atwww.vasfaa.org

37. FastWeb Use the Internet to find scholarship opportunities www.fastweb.com • FREE personalized scholarship matches • Over 1.3 million scholarships • $3 billion dollars in aid available • On-line applications • E-mail alerts when new awards become available and deadlines approach • Helpful articles, bulletins, and how-tos • Expert advice on financial aid

38. Best wishes for your success! This presentation was created by FastWeb Students complete a free scholarship search visit www.fastweb.com Educators find helpful resources, how-tos, and articles for your students visit www.fastweb.com/educator If you have any questions or comments about this presentation, please contact the Member Services Department at 1-800-FASTWEB(327-8932) ext. 3